good morning. i'm willie geist, and this is "way too early," the show that was the runner-up in the 1991 women's world cup. i'm glad you're up with us this morning watching on msnbc or listening live on sirius xm radio. shoot me an e-mail at waytooearly@msnbc.com or tweet me. or do what abby wambach and text the word "awake" followed by your response to 622639. we'll read the responses later on in the show. the next 30 minutes is your cram session for this thursday, july 14th. a lot to talk about, including the possibility that ratings agency moody's could downgrade the credit of the united states. we'll tell you what that could mean. plus a huge cameo on last night's "daily show" from jerry seinfeld. we'll tell you why he slapped jon stewart right across the mug. first let's get to the news live at 5:30 a.m. here at 30 rock in new york city. we start with some breaking

news, where afghan officials say a suicide bomber has attacked a mosque in kandahar during a memorial service for president hamid karzai's murdered half brother this morning. at least four people were killed in the blast, including the head of the province's religious council. a second explosion was reported nearby the mosque, but no additional information has been released on that so far. we'll have more on this story throughout the morning as it develops. again, four people are killed at a memorial service for the half brother of hamid karzai, killed a couple of days ago. back to domestic politics here. by the admission of the participants themselves, the budget negotiations between congressional leaders and the president have taken a step backward. today will be the fifth consecutive white house meeting to try to reach a deal on raising the debt ceiling. without a resolution in sight, house speaker john boehner is comparing the talks to jell-o, saying, "some days it is firmer

than others. some days it's like they've left it out overnight." but sources from both parties zayed was the most tense meeting yet, with the big sparks coming from president obama and house majority leader eric cantor. there was a push for the short term increase to the debt limit. the president refused to agree to that. the president said, i have reached the point where i say enough. would ronald reagan be sitting here? i've reached my limit. this may bring my presidency down, but i will not yield on this. that a quote from the president as characterized by a republican aide. aides say cantor interrupted the president three different times during the meeting, and the president finally said, don't call my bluff. i'm going to the american people on this. speaking to reporters after the meeting, cantor said the president lost his temper and abruptly walked off. eric cantor accusing the president of storming out of the meeting. but democratic officials dispute

cantor's account. this is a he said/she said of this meeting. the group will reconvene at the white house to discuss taxes. the obama administration is expected to present its plan for more revenue in order to meet the $2.4 trillion figure that house republicans say they need to reduce the deficit and raise the debt ceiling through the end of 2012. meanwhile, senate minority leader mitch mcconnell said there's no question the debt ceiling will be raised. speaking on laura ingram's radio show, mcconnell acknowledged the backup plan he unveiled this week is largely a political move. >> just like we knew shutting down the government in 1995 was not going to work for us. it helped bill clinton get reelected. i refuse to help barack obama get reelected by marching republicans into a position where we have co-ownership of a bad economy. >> mcconnell's proposal, which would allow president obama to increase the debt ceiling himself without getting any concessions, has won some compliments from democrats,

including house minority leader nancy pelosi and senate majority leader harry reid. >> i commend him for his thoughtful and unique and, again, all i can reiterate is that people across america are saying the spepding is what has to be addressed. it's too much. it's got to be limited. >> failure to reach a deal on the deficit won't just mean a delay on the payment the government makes to creditors. it could also have serious consequences for the united states credit rating. that's according to both moody's and standard & poor's ratings

agencies, which are sounding the alarm as the deadline gets closer. for more on what all this means, we bring in cnbc's steve sedgwick live in london. good morning, steve. >> good day to you. moody's joining s&p in saying, look, guys, if you don't raise this debt limit, which you reached on may 16th anyway, at $4.3 trillion, there's a threat you're going to lose your aaa rating, which means people are not going to want to hold what's been seen previously as ultrasafe bonds. what boosted the markets before that was ben bernanke, who's been appearing on capitol hill and actually said the economy is in worse shape than expected, saying the possibility remains that the recent weakness may prove more persistent than expected and that deflationary risks might reemerge, implying additional policy support. that additional policy support could be some form of qe3, more quantitative easing, and people assume after qe# in june, that

was it. so that was tantalizing to the markets, which rallied on the back of that. >> thanks, steve. the front of the "the wall street journal" this morning saying raiders put u.s. on notice. this would be an unprecedented drop if it were to happen in the aaa credit rating. elsewhere, scotland yard said it's made a seventh arrest in connection with the phone hacking scandal surrounding the "news of the world" tabloid. there are calls here in the united states for investigation of reports that victims of the september 11th attacks also were targeted. new york congressman peter king, chairman of the house homeland security committee, is weighing in. >> i am asking the fbi to investigate it, to find out what the facts are. now, a lot has come out about hacking. we have reports that they were hacking into phones after 9/11 and to 9/11 victims. and since so much else has come out, i think it's important that this be investigated and tracked down.

if it turns out not to be true, then that's great. on the other hand, there's too much out there right now for this not to be investigated. >> the controversy led newscorp, parent company of "news of the world" to pull its bid for british sky broadcasting yesterday, and now there are questions about the future of the media empire built by rupert murdoch. nbc's stephanie gosk has more. >> order! order! >> reporter: in parliament, politicians for once found something they could agree on. rupert murdoch's news corporation, they said, should drop its bid for british tv network b sky b. >> and they should stop thinking about mergers when they've got to clean up the mess they created. >> reporter: but newscorp beat them to it. >> have announced they will withdraw. >> reporter: walking away from biggest merger in the corporation's history, potentially worth billions. in a statement the company said

"it has become too difficult to progress in this client." the climate turned hostile with reports that a 13-year-old murder victim's cell phone had been hacked by "news of the world" reporters. newscorp shut that paper down, perhaps hoping to save the bskyb deal, but it didn't work. >> rupert murdoch has rarely been thwarted in his ambitions. for the most part, he has ultimately achieved what he wanted to. >> reporter: he has achieved a lot, building the second largest media empire in the world, starting in australia with a single newspaper inherited from his father, rupert murdoch has amassed some of the world's best known, most watched brands. movie studios, television networks, cable companies, internet properties, magazine and book publishing -- all part of the murdoch empire. if you're watching "american idol," "the simpsons" or "glee," you're watching newscorp. "the wall street journal," "new york post," fox news, and 20th seen tury movie blockbusters

like "x-men" -- all have amassed a fortune for murdoch, giving him enormous political clout. now for the first time that is in jeopardy. >> again, murdoch dropping his bid to purchase the satellite tv giant in great britain. india's minister confirms the use of deadly sodium nitrate in the blast. the explosions killed at least 7 people and wounded more than 100. it's too early to know who's behind the bombings. it's the worst terror attack in the city since the siege by a pakistani terror group in 2008 that killed 166 people. pakistan condemned yesterday's violence, and representatives from both countries are expected to meet later this month. secretary of state hillary clinton also condemned the bombings and said that she will go ahead with plans to visit india next week.

sarah palin is now giving a rough time frame on whether or not she will join the 2012 race. the former alaska governor telling fox news last night she will announce her intentions in late august or early september. this comes after her comments in the latest issue of "newsweek" where she said, quote, "i could win." in a cryptic statement last night, the former vice presidential candidate said she's still thinking. >> you know, i did say in that article that i believed that i could win, and then i went on to say, but it doesn't have to be me. i'm not so egotistical to say it can only be me to turn this country around. if there are those out there willing to serve with good executive experience who have that servant's heart and know not to be so obsessively partisan that they can't do what's right for the people who have elected them, then i would certainly find that person and support them and do all that i could to make sure they defeat

barack obama in 2012. now, i'm not wholly confident that we have that filled set yet, that that one individual is in the field. so i'm still thinking about being one who would offer myself up in the name of service. >> former governor palin went on to say that legally there is a time frame for a candidate to enter, and she will stick to that time frame. still ahead on "way too early," the american women do it again, moving past france with the help once again of abby wambach's head. highlights from the team now one game away from winning the world cup. and why was jerry seinfeld counseling jon stewart last night? we'll have that clip and a check on weather. i didn't cry for the

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welcome back to "way too early." it's 5:45 in the morning as you look at a live picture of a times square that has finally cooled off a little bit. let's get a check of the weather from nbc meteorologist bill karins. bill, sweet relief. >> can you hit the record button on this? this forecast i'm going to give today is going to be the same for the next five days. i want to take some time off. >> that's good, right? >> for some of us. for a lot of us in new england, you probably felt it late last night as the wind started blowing, cooler air moved in. if you open up the windows, i'm

sure it's a little cool in your house for once. temperatures in the 50s in much of new england. that's in the city. you've got to imagine the suburbs are cooler than that. it's 65 in new york or 71 in d.c. that's the warm spot on the map. a little rain overnight in boston. that's going to be gone this morning. what a glorious, beautiful weather pattern we're in. temperatures definitely on the cooler side. the problem spot, middle of the country once again. we're dealing with 100s from dallas to san antonio. the middle of the country baking in the heat. the eastern half of the country, we get our break. >> we'll take our break and hope they get one eventually. bill, thanks so much. let's turn to sports. we begin with the united states women's soccer team now one win away from their third world cup title. yesterday against france in the semifinals, coming off that incredibly dramatic quarterfinal game against brazil and a great start for the states. nice move by heather o'riley to get the cross. lauren cheney chips it in.

troops watching across the world like what they see. hope solo gets a glove on it to keep it out. nice move there. a set piece from france. they fire a shot off the cross bar. still 1-0 at halftime. 54th minute, france with a great ball into the box. a tough play for solo, expecting a header of the ball, sneaks off the back post, and we are tied at 1. in the 70th minute, the french keeper cannot hold the save. oh. alex morgan on the rebound, though, called offsides. nine minutes later, usa with a corner kick. this looks familiar. abby cam bawambach gets her hea it, and it goes in. wambach, the hero against brazil, does it again, puts the united states up 2-1. three minutes later, another great play. alex morgan shoots with her left foot over the keeper. usa advances with a 3-1 win over france. japan beat sweden yesterday also by a score of 3-1.

so united states versus japan for all the marbles at the women's world cup. the final this sunday 2:45 eastern time. earlier this week, we told you about the yankee fan who handed over derek jeter's 3,000th career hit and how he might get stuck paying some taxes on the free tickets and memorabilia he's getting from the new york yankees. well, we can stop feeling bad now for 23-year-old christian lopez. here's why. miller high life has offered to pay for all of his yankee related taxes should the irs come after him. nice pr move by miller there. and two companies, modell's sporting goods in times square and steiner sports say they will each donate $25,000 to lopez to help pay his outstanding student loans. nice work. doesn't stop there. modell's gave lopez their 2009 world series championship ring that they received as sponsors of the yankees. modell's going over the top. also, get this.

topps says it will feature a e trading card featuring lopez to come out later this year. a milestone for rutgers. eric legrand was paralyzed during a game last october. here he is yesterday tweeting himself standing up for the very first time since his spinal cord injury nine months ago. he was initially paralyzed from the neck down. he's made steady progress, though. last week he tweeted that he was moving his arms little by little, and now as you see in that great picture standing up on his own two feet. by the way, the british open just under way this morning, being played at the royal st. george in sandwich, england. standing atop the leaderboard, thomas bjorn and american mark calcavecchia at 2 under. rory mcilroy 2 over. phil mickelson tees off later

this morning. did the president lose his temper and storm out as eric cantor is alleging? more importantly, do these guys have any shot at making a deal now? we'll discuss that with our crew. when we come back here, we'll huddle around the water cooler, where jerry seinfeld pays a visit to jon stewart and promptly slaps him across the face. tell you why jerry smacked jon stewart when "way too early" comes right back. verizon claims its 4g lte is twice as fast as at&t. we're putting them to the test against the speed of a rescue unit. go ! they're downloading a music album. the first network to finish gets rescued. does your phone know that we're racing ? done ! verizon's done ! i've got seven left ! the fastest network in america. verizon. built so you can rule the air.

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the words unprecedented and historic are being thrown around quite a bit in the talk of a potential u.s. default, but their main fact, the precedent. if you want to sound smart, tell your friends that a 1979 last minute approval to raise the debt ceiling, combined with investor demand for treasury bills and technical glitches caused the u.s. to suffer a technical default. the incident resulted in thousands of late payments to holders of treasury bills. those investors were paid back in full and with interest within weeks. the u.s. treasury department says the 1979 incident is not considered a true default. now for the real news, let's huddle up around the water cooler to watch a immediating of the comedic minds on the "daily show" last night. a little background for this gag you're going to need.

jon stewart talking about michelle bachmann's husband, dr. marcus bachmann. he runs a therapy clinic. now he was caught on tape, not him, but someone working in his clinic, abc released the tape earlier this week, suggesting to a gay person at the clinic that he could pray away the gay, if you will. so jon stewart brought in his own therapist, a comedy repression therapist to help him repress his feelings, his jokes to ridicule marcus bachmann. stewart suggested he needs help himself. >> you're having trouble, jon. you're having that urge to ridicule again, aren't you? >> yeah, i am. presidential candidate's husband is trying to cure gay people while himself -- just take a look. >> okay. ♪ >> wow, okay. i'm coming in.

>> really? okay. >> you need to get it out here. what's your body wanting you to say? >> i don't know, something like he's so gay he calls "top gun" that volleyball movie. >> oh, my god, wow. >> no, no. >> wow. >> no. >> wow. >> why don't you try watching the footage and making some astute observations? >> all right. >> look at him. he's a big man. he's dancing. what kind of dance is he doing? >> i think it's called the shag, i think. >> the shag. that's a funny name. and he's got a funny name. >> marcus bachmann? how is that funny? >> bach-man, what is that? some classical music super hero? bach-man? you see? this is a target rich environment. i can't believe you get emmys for this crap. you see me getting laughs?

just at the way that i talk? >> yes, yes, i see you getting laughs. >> no, they're not laughing because -- this is just my natural tone. >> just your tone, that's a funny tone. you have a funny tone. >> no, no. >> that is a funny tone. >> no tone. this is not a tone. >> the two of them made some nice progress last night. still ahead on "way too early," why are you awake? your unreasonable tweets, texts, and e-mails are next. [ female announcer ] now, give dry, damaged hair a whole new life!

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we asked you at the top of the show what you're doing up at this hour. producer rob gifford has some answers. >> mark writes "listening while driving home, piloting my boeing 777 from saopaulo to miami. >> are you sure your name's not john travolta? have you seen he's got a parking spot at his garage for his boeing? >> rob writes, "i got up early to take my dead pet to the >> yeah. oh, my god.